Sterling has begun the week on the back foot as concerns over the Brexit outcome are building ahead of the parliamentary vote on Theresa May’s withdrawal agreement tomorrow, 12 March. The Pound slipped to a three-week low of 1.2952 against the Dollar and to 1.1526 against the Euro.
May looks highly likely to lose the vote in Parliament as she failed to secure new concessions from the European side on the Northern Irish backstop. With another defeat on the horizon, the question is what Brexit will look like after this. MPs may vote as early as this week on whether to support a no-deal Brexit, or to ask the European Union for an extension to the 29 March deadline.
Across the Atlantic, US President Donald Trump today will set out a new federal budget aimed at slashing domestic spending and finding funding for his Mexican border wall.
The fiscal plan is likely to raise fears of another government shutdown as Trump is looking to cut non-military spending by 5 per cent and will demand $8.6 billion, having earlier declared a national emergency to squeeze funds for his border wall.
With a data-light start to the week, politics will dominate markets. UK Chancellor of the Exchequer Philip Hammond will deliver his Spring statement on Wednesday, 13 March, which could be overshadowed by the Brexit vote the day before. However, the chancellor will have an opportunity to give his verdict on the health of the UK economy and new growth forecasts.
May’s envoys return from Brussels empty-handed